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Stocks finished higher Wednesday as appetite for technology shares, which had taken a pause from their rally in recent days, resumed amid some signs of a slowdown in the spread of the coronavirus pandemic and stronger-than-expected economic data.
How did major indexes fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% rose 289.93 points, or 1.1%, to end at 27,976.84. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.53% added 44.66 points, or 1.4%, finishing at 3,380.35, after briefly trading above its all-time closing high of 3,386.15 set Feb, 19. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.42% climbed 229.42 points, or 2.1%, to end at 11,012.24.
The Dow on Tuesday finished with a loss of 104.53 points or 0.4%, at 27,686.91. The blue-chip gauge was up more than 300 points at its session high. The S&P 500 ended 26.78 points lower, a loss of 0.8%, at 3,333.69. The tech-heavy Nasdaq Composite dropped 185.53 points, or 1.7%, closing at 10,782.82.
What drove the market?
Stocks resumed a rally that left the S&P 500 within a whisker of its Feb. 19 all-time closing high, while taking back nearly all the ground lost in late February and March in a pandemic-inspired selloff that saw the benchmark fall around 34%.
A slowdown in the number of new COVID-19 cases in the U.S. and optimism over efforts to produce a vaccine have been cited as drivers for recent gains. High-frequency economic indicators also suggest the recent loss of momentum in the U.S. recovery was beginning to reverse.
“Now we see those numbers turning over, it seems people are going back out some more. These indicators are worth looking at just to make sure we don’t reverse the progress we’ve made since May,” said Esty Dwek, head of global market strategy at Natixis Investment Managers, in an interview.
House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer said that Treasury Secretary Steven Mnuchin proposed a new meeting on coronavirus aid, but that the White House showed no willingness to budge on the “size and scope” of a spending package,” in a statement , underscoring the legislative impasse.
Analysts also expressed concerns around legal challenges to and the effectiveness of executive orders signed by President Donald Trump over the weekend aimed at extending some of the elements of spending measures that lapsed at the end of July.
“It is not clear that it is even legal, and it could be challenged in court,” Brian Rose, senior economist Americas at UBS Financial Services, wrote about the executive actions on Wednesday, while also pointing to delays in further pandemic aid that could result in “considerable harm to the economy, and employment could start to fall again.”
“The uncertainty caused by the pandemic is already making it more difficult for business to hire workers. Adding more uncertainty over fiscal policy is particularly unhelpful at this moment,” Rose said.
Markets on Wednesday appeared to have little reaction to presumptive Democratic presidential nominee Joe Biden’s pick of California Sen. Kamala Harris as his running mate, the first Black American woman and the first person of Indian decent to appear on the ticket of a major national party.